Agents and the AHCA

by Corina Munoz


The Congressional Budget Office (CBO) released its highly anticipated analysis of the new legislation to repeal and replace Obamacare on Monday afternoon, including findings that the law will leave millions more people uninsured compared to the current health care law.

The CBO report finds that under the American Health Care Act, which repeals the Affordable Care Act signed into law by former President Barack Obama, 14 million more people would be uninsured than under current law by 2018.

Additional data suggest that the deficit of uninsured Americans would rise to 24 million in 2026 and the report also indicates the legislation bill “would reduce federal deficits by $337 billion” by 2026 as well.

For agents – most of whom are independent contractors – certain proposed changes could have a big impact on their lives and businesses.

No more individual mandate

While individuals wouldn’t incur a penalty for foregoing buying insurance under the change, the bill would impose a so-called “continuous coverage incentive.” Under that directive, insurers would be directed to charge a 30 percent late enrollment surcharge, designed to encourage individuals to maintain health insurance coverage, according to a House Energy and Commerce Committee summary.

In its recent coverage of NAR’s review of the proposed changes, Realtor magazine noted that this especially resonates within the real estate industry, given that many associates, of course, must secure their own health insurance as independent contractors.

Introducing age into the equation

Other aspects of the ACA would change under the new legislation. For example, the Realtor magazine article points out, while those experiencing difficulty paying their premiums would continue to receive assistance, under proposed changes, instead of basing the assistance solely on income, the legislation would insert an age-based calculation. That’s noteworthy, considering real estate professionals tend to be older than the general population, with a median age in the mid 50s.

The new health bill enables insurers to charge older people a premium up to five times what they charge a younger person instead of up to three times, as was the case under the ACA. States would receive flexibility to set their own ratio, according to the Energy and Commerce summary. Pre-ACA, some state laws allowed age rating bands of as much as 28:1.

However, insurers would be precluded from denying coverage to people with a preexisting condition as long as they hang onto continuous coverage, as well as from capping the lifetime benefits a person can receive. Until age 26, children also are allowed to remain on their parents’ coverage, as they are under the ACA.

The bill is limited to matters affecting revenue, so several important aspects of the ACA, including association health plans, aren’t addressed.

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